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<\/i>Sagar\nMalviya, The Economic Times<\/i><\/p>\n <\/i>Sagar\nMalviya, The Economic Times<\/i><\/p>\n
Mumbai, 24 October 2016<\/i><\/p>\n
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Procter\n& Gamble (P&G), the world’s biggest consumer goods\ncompany, is exploring a long-term partnership with Kishore Biyani’s\nFuture Group akin to the one it has with Walmart in the US, that could\ninvolve joint sales forecasting and planning, exclusive product\nreleases, embedding officials at each others’ headquarters and even\nsupply-chain initiatives.
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\nTop executives of P&G and Future Group have held a series of\nmeetings to take their association beyond retailer-client relationship,\ntwo officials aware of the development said. While discussions are at\nan early stage, a few senior executives from P&G’s global\noffice are expected to meet Future Group officials next month to\ndeliberate on the contours of a long-term joint business plan.
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\n“It could be a similar partnership that P&G has with Walmart in\nthe US where they share data on consumer behaviour, plan product\nlaunches and even lean on each other for supply-chain initiatives,”\nsaid one of the officials.
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\nA month ago, P&G global chief executive David Taylor visited\nIndia and toured a few retail outlets, including Big Bazaar. Last week,\nBiyani and Future Group’s FMCG president Devendra Chawla visited\nP&G’s Cincinnati headquarters.
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\nP&G’s three entities in India, which sell products ranging from\ndetergents and shampoo to razors and sanitary napkins, have a combined\nrevenue of under $2 billion, less than 3% of its overall global sales.
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\nThe business pales in comparison with Unilever’s that is nearly thrice\nas big in the country with products across price points. However,\nunlike its Anglo-Dutch rival, P&G has been more focused on\npremium products that generate high sales at modern trade outlets in\ncontrast to its rivals who stock several mass brands on retail shelves.\n
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\nFuture Group has the widest network in the country with around 13\nmillion square feet of retail space in 221 cities through a 700-odd\nstore network of supermarket brands such as Big Bazaar, EasyDay and\nNilgiris.
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\n“It is standard practice for us to engage with our partners across the\nretail landscape, including all our partners in modern retail,\ne-commerce and traditional retail, to develop unique plans that create\nsuperior value for the shopper,” a P&G spokeswoman said. Future\nGroup declined to comment.
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\nP&G has invested more than Rs2,000 crore in India in the past\nthree years, mainly to set up manufacturing units to reduce dependence\non pricier imports. At present, it has seven manufacturing facilities\nin six states, accounting for more than 90% of its products sold in the\nsubcontinent. P&G’s strategy in India has been paying off —\nprofit margin is up 750 basis points and the company has gone from\nlosing significant money in the country to triple-digit profits in the\nlast two years.
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\n“As modern\ntrade grows, P&G would want a significant share similar to what\nit has in developed markets. So, rather than just a distributorled\nmodel, it is a smart step to align its needs with that of a retailer.\nCritical issues such as lower product availability on shelves could\nalso be addressed,” said Devangshu Dutta, CEO at Third Eyesight, a\nretail and consumer goods consulting company. <\/span>
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